South America: rising concerns over maritime security

29 May 2018

Latin America

Maritime Security

South America: rising concerns over maritime security

South America does not usually come to mind when the topic of maritime security is brought up. The region does not suffer from the high-impact offshore kidnaps and hijacks that pose a considerable threat to vessels and crews operating in the high-risk areas of the Gulf of Guinea, Horn of Africa and South-East Asia. Instead, countries such as Venezuela, Colombia and Brazil have traditionally been seen as relatively benign operating environments for commercial shipping. However, although maritime risks in South America are less conspicuous than in the high-risk areas, over the past year Control Risks has observed the emergence of subtle new security concerns. These trends are likely to be consolidated and in some cases will intensify over the coming years.

Targeting of commercial maritime assets

Fishermen working on the oil-rich Lake Maracaibo have for years been the victims of periodic violent armed robberies, which have often resulted in the deaths of their colleagues. Over the past year, criminal groups in the area have continued to perpetrate such attacks, while also increasingly targeting commercial maritime assets. In an attack in November 2017, six armed men boarded an oil rig positioned off Ciudad Ojeda and threatened the crew before escaping with equipment and personal belongings. It was the second robbery in a week on rigs belonging to this particular company. According to the overwhelmed local police force, five offshore robberies against oil employees are recorded every week, though the actual figure is likely to be far higher.

Control Risks expects attacks on commercial assets in the lake to increase over the coming year, as robberies of local fishing vessels decline. Venezuela’s ongoing economic crisis has led to chronic shortages of food and consumer goods. As onshore conditions continue to deteriorate, fewer fishermen will be able to replace their stolen outboard motors, and those who can, will have less to offer criminal groups. Encouraged by the fact that local security forces are underfunded and overstretched, these groups will instead turn their attention to commercial assets, which are likely to have a number of valuable items on board. Those responsible for the robbery in November escaped with mobile (cellular) telephones, laptop computers, televisions and cash, all sought-after commodities in Venezuela.

Operational and security problems in Venezuela

Companies in Venezuela do not just face risks during the oil production stage. They also increasingly face operational and security problems when calling at the country’s ports and terminals. The various anchorages off the city of Barcelona have become a hotspot for robberies, with many crews unable to obtain a reply from the local port authority once a distress call is issued. A less obvious risk stems from the break-ins reported at Venezuela’s refineries and export terminals. Meanwhile, a shortage of funds and spare parts has resulted in a lack of repair work at these facilities, making oil spills increasingly frequent. Aside from the possible closure of export terminals, these spills have previously resulted in the staining of vessels’ hulls, a significant operational issue given that many jurisdictions prohibit dirty ships from entering their territorial waters. The shortage of cleaning facilities in Venezuela compounds this problem, and can result in lengthy delays and associated costs to shipping companies.

Increasing risk of drug trafficking

This relatively new operational concern adds to the problem of drug trafficking that has afflicted much of South America for decades. Criminal groups are constantly coming up with innovative ways of using merchant ships to transport drugs. They have recently focused smuggling attempts on vessels transporting perishable goods, with the view that such cargo faces less rigorous security checks because of time constraints, raising the possibility of contamination and loss of cargo.

Of greater concern to shipping companies is likely to be the use of stowaways to transport drugs, an increasingly common occurrence in ports along Colombia’s Caribbean coast. In January 2018, ten people suspected of transporting 185kg of cocaine were discovered on board a container ship that had just departed the port of Cartagena. Beyond the obvious security concerns associated with having unauthorised persons on board, vessels that fall victim to this type of activity can face lengthy delays while authorities carry out investigations. The container ship in January returned to Cartagena for just 24 hours. However, a liquefied natural gas (LNG) carrier was impounded for more than two weeks after a stowaway carrying cocaine was discovered off the port of General San Martin (Peru).

Localised risk of civil unrest

Although this tactic is most frequently used at Colombia’s Caribbean ports, the country’s major Pacific port of Buenaventura also presents shipping companies with the risk of localised civil unrest. The port is fundamental to Colombia’s exports of coffee and sugar, as well as general trade with the Asia-Pacific. However, despite being a major logistical hub, Buenaventura has an unemployment rate double that of the national average, with many of its residents lacking basic services such as drinking water and medical care. This drove the local population to conduct a general strike in May 2017, blocking the city’s roads and crippling the port’s onshore supply chain. According to the local chamber of commerce, the strike resulted in an estimated cost to maritime trade-related activity in excess of USD 5.5m. Although an agreement was reached, further protests, blockades and riots could occur over the coming year, particularly if the government is unable to fulfil some of its promises on employment, infrastructure and public services.

Maritime criminality in Brazil’s Amazon region

Similar limited job opportunities and strained public finances, fuelled by massive population growth, are also driving maritime criminality in Brazil’s Amazon region. According to the National Federation of Waterway Navigation Companies (Fenavega), an estimated USD 31.5m of cargo is stolen annually in the region. This is in part because of a rise in piracy attacks, which reportedly increased from 50 in 2015 to 200 in 2016. Increased military spending is unlikely to resolve the situation in the short term, with the region’s large isolated areas making it almost impossible to patrol effectively. Instead, Brazilian pirate groups have turned the maze of internal waterways and dense forest into an operational advantage, in much the same way as their counterparts in Nigeria’s Niger Delta. According to the Ship owners’ Union of Para (Sindarpa), more than 70% of piracy attacks occur in areas not covered by telecommunications networks.

South America continues to present a favourable maritime operating environment. Nonetheless, dire economic conditions in Venezuela, societal pressures in Brazil and Colombia, and a history of entrenched organised crime mean certain areas of the continent are beginning to exhibit ideal conditions for an escalation in maritime criminality. It is difficult to determine whether high-impact forms of piracy such as kidnap and hijack attacks will emerge over the coming years. However, the apparent inability of several governments to cope with less sophisticated forms of maritime crime should raise concerns for companies operating offshore assets in the region.